A sticky situation

- Last updated on GMT

Related tags: Sugar, European union, Eu

Despite the failure of Cancun, it still seems likely that Europe's
sugar regime will be overhauled. Europe's farm commissioner said
that the continuation of the EU's heavily subsidy sugar industry is
simply unviable.

Despite the failure of trade talks at Cancun, it still seems likely that Europe's sugar regime will be overhauled. Speaking on Sunday at the start of a meeting of EU agriculture ministers in Italy, European Farm Commissioner Franz Fischler said that the continuation of the EU's heavily subsidy sugar industry is simply unviable.

Sugar was one of the few sectors to remain untouched following a significant shake-up of the EU's Common Agricultural Policy (CAP). The support system for sugar, which has been around since 1968, has kept internal prices at more than three times those on the world market, according to Reuters.

"We need some sort of change, with or without Cancun,"​ said Fischler. "We will have to consider which option to take, and there is also an important international aspect to all this. But the status quo is totally unsustainable, all the ministers are totally agreed.

TThe EU has been under pressure to shake up a system that has been around for decades. Sugar remains a heavily subsidised sector under the CAP. Almost half the EU's 100 billion euro annual budget is devoted to the CAP.

Fischler is due to present a paper tomorrow containing three options for sugar reform. Farm ministers will have the opportunity to discuss the issues, which could shape the future of the EU's sugar policy.

Any reform is likely to include cuts in minimum prices paid for beet and white sugar. This would greatly affect the profits of Europe's largest companies.

Other options are either to prolong the current regime or go for complete liberalisation. Neither are seen as likely.

Related topics: Ingredients

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